...it's just not a very simple one.
A note to start with: This is focused on games where the story is an important component. Not all games are like this. Assume that we're talking about action/adventure/rpg/etc. games with a significant narrative.
Also posted at my blog.
Few would argue that a compelling story involves the following four elements:
"Traditional" storytelling media (e.g. books, films) are pretty good at ticking these boxes (literally—for example, there's a how-to book for movie scripts).
Following the same advice and patterns has worked ... okay ... for video games, but runs into the usual problem with an interactive medium. The player is the protagonist. This means you have a conflict between giving the player freedom to do what they want to do, and ensuring that the protagonist does what is needed for the next part of the story.
Different games manage this better or worse, and various techniques have been used (e.g. "gating" parts of the game to make sure the player experiences things in the right order). But players of some games have reacted loudly against being "railroaded"; feeling disconnected from the game, that their actions don't matter, that the controls may as well be "Press X to see the next scene".
Yet it should be easy, shouldn't it? Games are all about the player/protagonist trying to overcome obstacles to achieve a goal. And games are pretty good at making the protagonist interesting—either through being a blank slate that the player can project themselves onto, or making appropriate use of pre-existing literary/filmic character design techniques.
Whether you refer to it as "ludo-narrative dissonance", "lack of engagement", "railroading", or whatever else, I suspect the same underlying issue with the story. The problem is that the player and the protagonist have different goals. As such, story progress (related to the protagonist's goal), makes the player feel disinterested (at best). If it gets in the way of the player achieving their goal, they may come to see the narrative as another obstacle.
An example of this is in open-world games where the player wants to muck about and explore, and becomes frustrated at the game trying to get them back to the main quest. Another example is a cut scene that presents a character the protagonist needs to rescue. The player is essentially told "this is your best friend", but they're thinking "no, Sam is my best friend****, this is just some random NPC that I'm going to be forced to rescue. Aw man, I hope this isn't going to be one of those escort missions...".
To fix this, we just need to make sure the player's goal matches (or at least is compatible with) the protagonist's. "Oh, is that all?" you might be thinking. The difficulty is how. To support my attempt at a general answer, I submit the following example.
Think of the opening scene of "Raiders of the Lost Ark" (What do you mean, you haven't seen it?!?). Imagine playing through something like that in a game. You have to navigate various traps to obtain the magic +3 Sword of Wompage—a significant improvement over your -1 Blunt Twig of Equivocation. You then get a brief chance to use the Sword of Wompage before, just as you've escaped the collapsing dungeon by the skin of your teeth, the villainous Baron Smarmy Twirlmoustache shows up and takes your new toy away. I would suggest that at this point, the goals of you (the player) and the protagonist are in perfect alignment.
So what are some general principles we can draw from this?
Game developers already consider the various types of player motivation they want to tap into when designing gameplay; the next step is considering how to align the story with it as well.
* Note: "interesting", not "likeable". The main character doesn't necessarily have to be someone the audience wants to be, or would like to meet, but the audience does have to be curious about what will happen to the character*** next.
** This doesn't necessarily align with whether the story has a "happy ending". Sometimes the best outcome for the protagonist is not getting the thing but realising they don't actually want/need it.
*** One of the benefits of an ensemble cast is that different audience members may be intrigued by different characters, thus keeping a wider audience tuning in than if the focus was mainly on a single protagonist.
**** Few know that Frodo was an avid gamer. There had to be something to while away those quiet, lonely nights in Bag End.